A Road To Sustainability for Nike, Incorporations

Group 6 Final Project Report Analysis for Business Sustainability

Written For:
Bayu Aji Aritejo, Ph.D.
Nuraksa Makodian, S.T., M.M., M.Sc.,

Written By:

Fany Kartika 16/392647/EK/20729

Ronald Andika P. 16/395960/EK/20932
Vincent Suryajaya G. 16/392662/EK/20744

Faculty of Economics and Business

Undergraduate Students of Management
Universitas Gadjah Mada
Yogyakarta, Indonesia
Date of Submission: 12 December 2018
 Table of Content

PART I

Introduction………………………………………………………………………………………. 2

PART II

Discussion…………………………………………………………………………………………4

2.1 Nike’s Approach to Sustainability with the Role of The Corporation………………………..4

2.2 Nike’s Approach to Sustainability with the Sustainable Frameworks………………………..7

2.3 Nike’s Approach to Sustainability with the Role of Government & NGOs………………...12

2.4 Constraints faced by the Company and How they deal with it……………………………...14

PART III

Conclusion………………………………………………………………………………………21

PART IIII

References………………………………………………………………………………………23

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 PART I
Introduction

Nike Incorporations, is an American multinational and globally known company as of

today. The company has its involvement upon the activities of designing, developing,

manufacturing and marketing its products of footwear at the very start of the business, but then

the company has diversified its products into apparel, sports accessories and equipments at their

current stage. The company was founded in 1964 formerly known as ​Blue Ribbon Sports by a

track field coach at the University of Oregon until the years of 1974 where its name was changed

into Nike until it went public on 1980 (Nike, Inc), and as of associated the company was

headquartered in Beaverton, Oregon. The very first outlet was opened in 1996 marketed its core

products of Nike shoes in 1972. Following the years of the company’s success, today they have

established in more than 170 countries through various strategies of diversification, acquisitions,

endorsements of marketing, outsourcing materials and many listed.

Heading back to the years of 1990’s, the company Nike, Inc., has been faced with issues

involving such as supply chain management, and in a response to that particular issue, the

company has matured by embracing transparency, collaboration and the movement of connecting

innovation and sustainability altogether to achieve positivity in creating products beneficial for

athletes, businesses and the overall environment.

Due to the company’s issues and criticism over labor practices that threatened the

company’s brand, the company would then took steps and embrace the origins of Corporate

Responsibility at Nike. In the past, the company was well known for its critics on inhumane

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treatment, grossly underpaid workers and other issues experienced by the company. Ever since,

the company has taken steps to develop to a better company through approaches such as

improving working conditions by expanding independent monitoring, raise minimum age

requirements, expand workers education programs, increase support of Nike’s micro-enterprise

loan programs for workers and many other steps taken when teams were created to form a new

corporate responsibility department.

As a result, environmental concerns moved into the mainstream and the programs

expanded into product recycling, water use in the supply chain and toxic substances in the

manufacturing processes. The official corporate responsibility was established in 2001 with other

members including Michael Spence and Richard Donahue, each with their own titles from the

dean of Stanford University and Richard was formerly known as the Vice Chairman of the COO

of Nike.

Today, every individuals upon the company are working together and more willingly to

take every steps possible to achieve that sustainable goals that Nike aims to become. They

believe that resources are scarce and that every steps taken would contribute to an overall

environmental impact upon the form of carbon footprint wastes, water usage etc.

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 PART II:

Discussion

2.1 Nike’s Approach to Sustainability with the Role of The Corporation:

Nike, as traditionally being recognized to be involved upon those scandals has resulted

the company to have high responsibility followed by the increasing demand that they keep on

receiving daily. Hannah Jones, being the vice president of Sustainable Business and Innovation have

established and turned the idea to curate the strategies and frameworks essentially for innovation and

sustainability for future comings. Furthermore, as just like other companies, Nike themselves have

experienced a limitation of resources and where prices of the world are increasing, which has posed quite

a challenge for the business. In an attempt to balance the goals whilst at the same time still focusing on

the company’s core capabilities, every individual within the company has their own role to contribute to

sustainability and corporation themselves are one the biggest part in the universe to be responsible to

limited resources of the earth.

For a particular product line of Nike products, the company would need solely 75,000 different

materials and for just one sneaker itself, and Nike would need around 300 different components in the

manufacturing processes (Nike, inc). Nike realized that they consume quite an amount of resources within

their production resources usage, and especially the fact that their actions contribute to climate changes in

two ways;

1) Nike’s had a ​heavy reliance on electricity and water supply for manufacturing​, distribution and

other activities that contributes to emitting greenhouse gasses such as carbon dioxide much faster, and can

affect the climate by trapping, absorbing and emitting infrared radiation in the wavelength range that has

been emitted by Earth​, in which over time contributes to global warming.

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 2) If climate changes occurs and infrequencies of rain and sunlight occurs due to the ​disturbance

of the water cycle and the increase of global warming,​ the world would experience a shortage supply and

an increase in prices due to natural disasters or a change of climate daily weather. This would further

would affect every parties in the 3BL (People, Planet, Profit).

If Nike does not address these vulnerabilities, its risks of rising production costs, would then

reduce the company’s margin or be passed down to the consumer, thus affecting product competitiveness

against other main competitors such as Adidas, Puma, Reebok International, New Balance and many

other sporting brands existing in the market either domestically or multinational form.

Nike Ambitious Goals to Achieve By 2020:

“At Nike, we believe it is not enough to adapt to what the future may bring – we’re creating the

future we want to see through sustainable innovation,” said Nike. Besides in restraining an excellent

Corporate Social Responsibility, Nike believed that they need to go further. To build new innovation

capabilities, as been said in the case that the sustainable team of Nike has successfully set up the

Sustainable Business & Innovation Lab, an internal strategic partnerships group charged with hunting

externally for technologies and collaborations with potential to drive sustainable value.

As an attempt for the company to become sustainable and environmentally friendly to enhance

positivity to all parties of the 3BL, the company have listed out goals to be achieved by the end of 2020

such as:

1. Minimize Environmental Footprint:

The company is aiming to minimize its overall environmental footprint throughout the

product life cycle by seeing the carbon and energy, chemistry, water and waste to identify any

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 strategies in order to use much less and better innovate new solutions to close the loop and reuse any

resources as possible.

For example, about 60% of the environmental impact in a pair of Nike shoes is embedded in the

materials used. It is important for the company to know the materials as it will matter the most, Nike is

investing in creating a new palette of sustainable materials in a move toward closed-loop products, and

has already incorporated recycled materials into 71% of its footwear and apparel products, in everything

from apparel trims to soccer kits to Flyknit yarns. ​“Water efficiency- Nike also managed to reduce water

use by “18% per unit in apparel materials and 43% per unit in footwear” which “far surpassed” the

company’s FY2015 goals”

2. Transform Manufacturing:

Throughout the company’s manufacturing revolution initiatives, Nike has put its emphasis on

how to make their products through a mixture of technology, labor and sustainable innovation. Today,

Nike is focused on creating technology-driven manufacturing, by being more environmentally friendly

and more sustainable factories that place highly skilled, engaged and valued workers at the center with no

less seeing the importance to keep the environment clean.

Nike is working with fewer, better contract factories that are committed to taking this journey.

Moreover, Nike is also running pilot research programs dedicated to engaging and connecting workers to

healthcare, education and finance networks to make positive changes inside and outside the workplace.

Here the company is focusing on the “People” part of its 3BL aspect of sustainability goals. ​“To source

100% of products from contract factories meeting the company’s definition of sustainable in the

environment and to create products that deliver maximum performance with minimum impact, seeking a

10% reduction in the average environmental footprint and an increased use of more sustainable materials

overall” a​ s it was stated on their website.

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 3. Unleash Human Potential:

Nike’s attempt is to maximize the potential of its own teams, by which the company believes that

power of diversity would foster creativity and accelerates innovation to achieve their Innovation &

Sustainability goals that was set up in the early 2000’s. Nike is strengthening its recruitment, promotion

and retention of diverse talent throughout the world with the goal of reflecting the diversity of the

consumers it serves and the communities where its employees live and work, and that the company will

continue to enhance their effort to expand their women representative in the industry.

2.2 Nike’s Approach to Sustainability with the Sustainable Strategies Frameworks:

Nike Water Program:

According to the World Economic Forum, water quantity and quality has been identified

as the biggest threat facing the planet over the next decade. Nike recognize the increasing risk of

water availability globally, and they’ve been working to reduce water footprint for years. Fresh

water is critical to everyone on this planet, whether for personal use, growing crops,

manufacturing products and washing clothes. Due to climate change, water is expected to

become increasingly scarce. Nike believe it is imperative to do their part to ensure water is

available for local communities as well as the business. Nike focused on using water more

efficiently, which, in part, means focusing on wastewater quality. Their moonshot goal is to

reduce the water use by half through innovation and efficiency across value chain.

To reduce the water use, Nike focused on four key strategies:

1) Innovate Low-Water Materials and Technologies​:

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Nike builds the capabilities of supply chain to ensure that they use water as efficiently as

possible to process the materials in the products.

2) Use Less:​

Nike build the capabilities of the supply chain to ensure they use water as efficiently as possible

to process the materials in their products.

3) Reuse​:

Their goal is to take water once and reuse it forever. Nike is scaling closed-loop water with their

materials suppliers to eliminate water withdrawals.

4) Scale through Industry Collaboration:​

Nike is collaborating across the industry to develop new ways to grow materials like cotton more

sustainably, especially in water-stressed areas. They want to drive systemic, industry-wide

change, setting standards that ensure other businesses are also returning clean water to the

system.

Nike surpassed their water reduction target in FY15, so they set a new target for 2020 to

reduce the amount of freshwater used by dyeing and finishing suppliers by 20%.

In FY16, their global team of water consultants deployed the Nike Minimum Water Program.

This program sets performance expectations for water stewardship, wastewater treatment data

collection, water scarcity and flooding risks. It also introduced an approach to water and

wastewater treatment equipment. The Minimum Water Program helps Nike find ways to be more

efficient and to prepare their suppliers for water recycling. To achieve a closed-loop future for

water (a future in which they reuse all the water in the system), Nike needs all their suppliers to

focus on resilience, efficiency and smart management. They collaborate primarily with their

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largest materials suppliers who account for approximately 80% of material production. These

suppliers have the largest water withdrawals and the greatest opportunity for adopting new

technologies, so Nike working closely with them to improve their water management,

wastewater treatment and recycling processes.

In addition to taking a proactive approach to helping their material vendors tackle their

water and wastewater challenges, Nike helping lead the development of the Sustainable Apparel

Coalition’s Higg 3.0 Facility Environment Module and the development and proliferation of the

Zero Discharge of Hazardous Chemicals (ZDHC) Foundation’s wastewater guideline. Through

these efforts, Nike driving change in water use and wastewater treatment across the industry.

Created by the Sustainable Apparel Coalition, brands and manufacturers, the Higg Index is a

suite of tools that enables brands, retailers, and facilities of all sizes to accurately measure and

score a company or product’s sustainability performance.

Circular Economy and Closing Loops:

A circular economy, as being widely recognized is an alternative to the traditional linear

form of economy where industries uses traditional methods of “make, use, dispose”, whereas in

fact the circular form of economy tries to keep resources in use for as long as possible by which

the user would then be able to extract the maximum value, recover and regenerate new products

from it. The closed loop concept recognizes the importance of the economy needing to work

effectively at all scales – for large and small businesses, for organizations and individuals,

globally and locally. Furthermore, in fact this concept of theory is not far from what has been

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implanted by Nike as of the current stage of the company in its aims to achieve their

sustainability goals.

Emphasizing upon the transition to using renewable energy sources, the circular model

builds economic, natural and social capital, of which it would benefit all sides from the aspects

of people, planet and profit. This circular model is in fact based on three principles; Firstly, its

design is aimed to wipe out waste and pollution in the environment. Secondly, it ensures that all

scarce resources are kept intact and materials in use continually. Thirdly, the system helps to

ensure that it is in fact a natural system with less risk of potentials of problems that will be

happening in the future.

As stated earlier upon the case of Nike, to build new innovation capabilities, the

Sustainability and Innovation group of individuals within the company has set up a “Sustainable

Business & Innovation Lab” with its goals to in fact to close all loops materials, resources,

energy and manufacturing processes to ensure that its wastes are as of the be used as maximum

as possible. Furthermore, as stated upon their website that “​The Nike Circular Innovation

Challenge called on designers, engineers, scientists and makers to join us in creating a more

circular future​”. Nike itself has started to adopt the Type III cyclical systems where it has the

greatest degree of cycling and the very least reliance on external resources, and aims for a perfect

closed industrial system that would require solar energy and all the by-products resulted to be

reused to optimize the goal of industrial ecology. Although it might not be possible to achieve a

full 100% of re-using renewable resources yet, as there would still wastes being produced, but

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Nike is taking forward steps to ensure that they would maximize to their fullest capacity to create

very little wastes.

As Nike’s attempt to further close the loops of materials and wastes, Nike Grind is a

palette of premium recycled materials being used in the manufacturing processes from used

footwear and manufacturing scrap. As to date of today, this palette have been incorporated into

more than 1 billion square feet of running tracks, gym floors and other surfaces around the

world. “In partnership with OpenIDEO, we sought to inspire the creation of products that

improve the lives of the people who use them, while also reducing waste at the same time. We

challenged the world to design and prototype promising new uses for Nike Grind materials” as

was said by the sustainability teams of Nike.

In making sure that the company achieves a circular economy, it is no surprise that they

would experience challenges along the way of the process. A critical barrier to achieving a more

circular economy is the challenge of recovering pure materials from recycled products. However,

as Nike created a form of cooperation in partnership with NineSigma the Material Recovery

Challenge, they sought to push the boundaries of what’s possible for footwear recycling by

challenging solvers to help Nike achieve higher quality material outputs from existing recycling

facilities.

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2.3 Nike’s Approach to Sustainability with the Role of The Government & NGO’s:

● Role of Government
​

What role, if any, should governments play in promoting sustainability? Governments

worldwide are beginning to recognize the challenge of sustainability, and this term is being
addressed in public policy discussions. Any one government cannot work in this area alone; it is
imperative to work with other governments in order to address the issue in a global context.

Governments need to be able to anticipate rising demand for sustainable products and
services. Governments can play a key role in aiding the transition toward more efficient, less
damaging economies. Those governments that can lead in this role would be able to set the
agenda for their economies, industries, and citizens.

In most developed countries, like the United States and Canada, the government is the
largest employer, the largest landowner, and the largest fleet owner. The government is also the
largest consumer of energy and has the largest impact on the environment. It stands to reason
that governments should incorporate sustainability principles in their internal operations.

In developing countries, the role of the government assumes even greater significance.
Within the realm of sustainability, the governments ought to encourage companies to address the
needs of the world’s entire population.

According to a KPMG report, the government has four distinct roles in addressing
sustainability concerns. These roles are as follows:
1. Policy development
2. Regulation
3. Facilitation
4. Internal sustainability management

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 ● Role of NGOs

The term ​NGO d​ escribes a range of groups and organizations from watchdog activist
groups and aid agencies to development and policy organizations. Usually, NGOs are defined as
organizations that pursue a public interest agenda, rather than commercial interests.

It is believed that the first international NGO was probably the Anti- Slavery Society,
formed in 1839. However, the term ​NGO o​ riginated at the end of World War II when the United
Nations sought to distinguish between private organizations and intergovernmental specialized
agencies. NGOs are a complex mixture comprised of alliances and rivalries; businesses and
charities; conservatives and radicals. The funding comes from various sources, and though
NGOs are usually nonprofit organizations, there are some that operate for profit.

Even though NGOs are highly diverse organizations, the one common goal is that they
are not focused on short-term targets, and, hence, they devote themselves to long-term issues like
climate change, malaria prevention, or human rights. In addition, public surveys state that NGOs
often have public trust, which makes them a useful proxy for societal concerns.
Next, we will discuss four important roles of NGOs. These roles are :

(1) social development,

(2) sustainable community development,
(3) sustainable development, and
(4) sustainable consumption.

In Nike organization this is some of the roles of NGOs :

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 1.​ ​ ​Greening the Supply of Products and Services

NGOs are developing or designing products that will minimize the environmental
impacts of consumption. The consumer is simply offered an alternative of more sustainable
consumption, and this choice is deemed empowering. For example, Nike is engaging the retail
sector to offer more sustainable green products. It also cooperates with the design of eco-friendly
product. This campaign has been successful in increasing demand for organic products in
Switzerland.

2.​ ​ ​Forming Extensive Networks of Different Stakeholders

NGOs enter into collaborations with other NGOs and businesses to highlight issues and
jointly look for solutions. For example, the Green Purchasing Network (GPN) promotes green
purchasing for Nike shoes among Nike consumers, businesses, and other governmental
organizations in Japan. The aims of this are to reduce the environmental and social impacts of
apparel and footwear products sold around the world by establishing an industry-wide index for
measuring and evaluating apparel and footwear product sustainability.

2.4 Constraints Faced by the Corporation and how did Nike deal with it:

The essential issue looked by Nike Inc. is expanded monetary misfortunes in the course
of the most recent couple of years. The expansion is credited to different factors, for example,
poor budgetary administration. Rivalry has likewise assumed an exceptionally critical job in the
expanded dimension of money related misfortune at Nike. Because of the high aggressive
dimensions, the business attempts concentrated showcasing among different exercises with the
point of winning back its piece of the pie. These showcasing exercises mean high uses that eat
into the business' overall revenues bringing about misfortunes in the organization.

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 What's more, abnormal amounts of rivalry additionally result in value wars in the market
that influence the business productivity. Brand control has likewise assumed a huge job in
budgetary misfortunes in the organization due to declined deals as the business is never again
beneficial. The issue of the expanded dimension of money related misfortune shows itself
through three issues specifically elevated amounts of use inside the company, large amounts of
rivalry inside the market and decrease in Nike's image influence.

The three problems are:

1. High expenditure levels within the corporation.
2. High Levels of Competition
3. Decline in the corporation’s brand power.

Recommendations and Implementation Plans

Nike, in the past were tremendously recognized as one of the corporations connected with
a continuous issues ranging from labor practices to unsustainable working practices on site of the
company in the year of 1990s. Despite the accusation, Nike believed that they have done nothing
wrong to disbenefit any individual within the workplaces and that working conditions should not
only merely being based on the U.S standards, but more into complying upon the rules in the
subsidiary markets worldwide. However, this view does not stand in accordance with the
external media and has led the company to hire Maria Eitel to be Nike’s very first president of
the company’s corporate responsibility, by which together they all worked together on
structuring and reconfiguring out frameworks and strategies to address the negative issues that
the company have had in the past, and also to better prepare for any particular accusation in the
future.

Being the fact that Nike was one of the corporation to enhance Corporate Responsibilities
Programs, they were one of the successes to be able to create a link between the company and
the consumers. Nike were able to translate the past issues by innovating new strategies and

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frameworks to enhance the overall company’s success. Today, Nike are taking a far tremendous
step forward to be more responsible towards the environment as it was said before by creating
the “2020 Goals” and there has been a transparency towards their progress in public. However,
despite the successes that the company can see towards CSR programs, there lies several other
issues and challenges as of today by the company and are listed below.

​Problem Statement 1: High Levels of Expenditure within the Corporation

Recommendation : Inventory Management

The partnership brings about a lot of costs during the time spent procurement and
capacity and capacity of stock. This is on the grounds that Nike is an assembling brand
subsequently utilizes a lot of stock in the day by day producing process. The procedure of stock
administration will guarantee that costs identified with the procedure of stock administration are
essentially made do with immaterial expenses being disposed of. The procedure of stock
administration will include changes in the procedures identified with stock administration. The
organization should calibrate their stock with the goal that they stock products for a brief span
before being utilized in the assembling procedure or sold. As a business, it is urgent to realize the
products should be loaded relying upon volume, accessible money, deals gauges, and the abilities
of the provider.

Moreover, organizations that re-move merchandise can likewise utilize buy arrange
financing when financing immense deals that outperform the capacities of their income.

Implementation 1: Standard Management

A few pointless costs in the business are credited to poor administration. Therefore,
choices identified with the administration of the association are not given due consideration. The
execution of successful administration will come in guaranteeing powerful administration will
come in encouraging the usage of practical choices that will come in overseeing costs in a viable
and effective way.

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 Setting up quality administration procedures can be unchallenging as sketching out a
rundown which gives each procedure laborers are required to use amid assessing the
merchandise they get. When each representative is going for the comparative destinations,
quality will develop. In the event that wears can't accomplish association goals, they know to
return them to providers. This stock control phenomenal technique guarantees no superfluous
development in stock dimensions, and specialists won't give buyers unsatisfactory stock.

Implementation 2: Optimization of Inventory

​

Good stock control is comprehension of stock and controlling it fantastically. At the point
when amazing stock strategies are actualized, the association would now be able to do the
advancement of stock amount to improve productivity as well as accomplish consistently
changing shopper prerequisites. In the ongoing commercial center, shoppers won't postpone to
socially share their dreadful frequencies when their prerequisites aren't met or simply searching
for an alternate association.

Enhancement techniques are critical to an association's financial development.

Carelessness to embrace stock great strategies can prompt losing the organization's customers,
cuts in stock, and at last specialist decreases. Different issues can be maintained a strategic
distance from when stock control best techniques are started at beginning periods. Taking Stock
administration as a priority can abstain from glaring wasteful aspects on the execution and help
exact methodology for tomorrow.

Problem Statement 2: High levels of Competition within in the market

Recommendation : Identification of New Niche markets.
Since the present markets possessed by Nike are immersed bringing about unreasonable
rivalry levels that are nearly dispensing with Nike from the market, Nike ought to distinguish and
contact new target advertises in an offer to make tracks in an opposite direction from soaked

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markets. Connecting with new market fragments will empower the business to grow its piece of
the overall industry thus achieve upper hands in the market.

Exchanging to contact a vast piece of the overall industry can develop the client base and
spread the hazard. Put into thought whether the organization can figure out how to move through
the web or universally, e.g., There are a few gatherings investigated previously and they may can
keen on organizations offer ?However,it is prudent not to dawdle promoting to people that aren't
in premium.

Implementation 1: Reaching out to customer needs and wants

People are hesitant to manage organizations which don't think of creative thoughts and
brands. Advancement makes energy the commercial center and clients like fervor. An
organization ought to contribute their opportunity to ponder the sort of response a brand,
administration will get from general society at its new propelling.

Advancement gives the commercial center something energizing to discuss. Notices

through the informal exchange advances the organization, services,and marks quicker. The
purchaser dependably get energized when they discovered something new and intriguing refresh
in the item, so it important to actualize the high caliber and new highlights makes them to tie
with product.If organization can figure out how to turned into a pacesster of the business,
whatever remains of organizations will accept it as a searchlight and following are some viable
usage

Implementation 2: Defining Your Brand

Brands and associations are ordinarily unique, and additionally clients, along these lines
there is the prerequisite for marking. What does the organization rely on? What's diverse about
the company in complexity to different organizations in a similar industry? What does the

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organization need to be known for in the commercial center? What is the forte of the
organization?

With presentation and rise of new rivalry, it is prudent to be set up to forestall loss of
some piece of the pie. Along these lines, the fantastic arrangement is to layout the brand and as
often as possible characterize its Interesting Moving Recommendation (USP). The surfacing of
rivalry transparently separates the solid and the powerless. It is the organizations which don't
evidently represent something which for the most part are tested amid times of firm rivalry. On
the off chance that organization does not represent something, it will succumb to anything.

To remain focused, association must stay particular. There must be an energizing thing in
organization which influences the customers to build up a misgiving of adjusting to the brand
rivalries.

Problem Statement 3: Decline in Nike’s brand power

Recommendation : Perform a Market Research
An item in limbo is likely confronting this issue: The item highlights and credits are not
speaking to the purchaser. On the off chance that an item's one of a kind incentive and center
advantages are not particular enough to separate it from contenders, at that point it has neglected
to persuade its objective market of its advantages.

The answer for this issue is to perform upstream statistical surveying and recognize the
progressive system of traits as far as both execution desires and the best related informing and
situating utilizing discrete decision examination with subjective input. A definitive objective of
statistical surveying is to comprehend client needs and to create items which take care of the
most dire client issues. This keeps away from the feared item limbo. Conjoint examination is one
approach to do that.

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Implementation 1: Market Testing
Any procedures or methods that a specialist assesses the generation, prosperity, standard,
and consistency of a brand with settled characteristics. Subsequent to doing the examination
about the item going to be propelled, it is shrewd to test it to prospect its prosperity. Actualizing
this will guarantee that the item is certain its disparities which will influence the clients/clients.

Organizations are constantly committed to testing the item energetically for the enhancement of
item quality to rule the aggressive items from different contenders in the market. Likewise builds
up the unrivaled review item may make the top notch cost over the others. This procedure
influences the item to persevere in promoting over the purchaser taste develops.

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 PART III
Conclusion

Nike has long believed that sustainability plays a critical role at the company. It is a
powerful engine for their future growth. Nike has spent more than a decade embedding
sustainability across the company to help spark creativity and innovation to drive new solutions
that deliver for athletes, the business and the world.

Setting impact reduction and improvement targets continues to be a key foundation

element in Nike’s mid-term strategy. The 2020 targets demonstrate Nike’s commitment to
setting aggressive efficiency measures across the entire value chain. They’re based on sound
science and data, and supported with robust controls and governance to monitor progress. Every
Nike business function is accountable for delivering against the sustainability goals. At the same
time, Nike aggressively investing in a portfolio of sustainable innovations to take beyond 2020
and on to their moon shot of doubling their business with half the impact. In order to achieve
this, and propel themselves into a low-carbon growth economy, Nike know product and business
model innovation will be critical.

Nike envision a transition from linear to circular business models and a world that
demands closed-loop products, designed with better materials, made with fewer resources and
assembled to allow easy reuse in new products. This will involve up-front product design, with
materials reclaimed throughout the manufacturing process and at the end of a product’s life. Nike
is re-imagining waste streams as value streams, and already designers have access to a palette of
more than 29 high-performance materials made from their manufacturing waste. Right now,
materials left over from producing Nike shoes are being reborn as tennis courts, athletic tracks
and new shoes.

Nike also focused on delivering the conditions for system change at scale. They are
dedicated to catalyzing and incentivizing change that will help unlock access to flows of capital
and level the playing field on standards across the industry. It is clear that no single company,

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organization or government has the ability to tackle the sustainable innovation challenge alone. It
is an opportunity to think and act differently together. It needs collaboration among industry,
civil society, policymakers, workers and business to deliver the financial, science and technology
resources and capabilities that will accelerate system-level change.

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 PART IV
References

● Paine, Lynn S., Hsieh, Nien He., Adamsons, Lara., (2013, June 17). ​‘Governance and

Sustainability at Nike (A)’​.

● Kaye, Leon. (2011, October 13). ‘​Nike’s Road to Integrating Innovation and

Sustainability​’. Retrieved from

www.triplepundit.com/2011/10/nikes-road-integrating-innovation-sustainability/

● Reports, Nike (2017, January). ​‘Nike Sustainable Reports’​. Retrieved from

www.sustainability.nike.com/reports

● Nike (2018, January). ‘Circular Innovation Challenge’. Retrieved from

https://sustainability.nike.com/circular-innovation-challenge

● Meyers, Kate. (2016, May 11). ​‘Nike, Inc. Sets Bold Vision and Targets for 2020:

Demonstrating Sustainable Innovation is a Powerful Engine for Growth and Catalyst for

Change’.​ Retrieved from

www.businesswire.com/news/home/20160511005885/en/NIKE-Sets-Bold-Vision-Target

s-2020

● Kleinfield, Hannah. (2016, November 2). ​‘Nike’s Path to Sustainability: Nike is

Implementing a Sustainability Plan with Ambitious Goals to Achieve by 2020’.​ Retrieved

from ​https://rctom.hbs.org/submission/nikes-path-to-sustainability/

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